Are Smart Meters a Bad Idea?

Energy-saving smart grid services over the Internet may be a better option.

When will home energy management finally become a reality for most of us? Conventional wisdom has been that managing your home energy use via home technologies won’t become mainstream until electric utilities finish rolling out millions and millions of two-way communicating smart meters—so we can benefit from energy-saving smart grid programs.

It makes sense, on the surface, that the smart grid would be the big driver for everyone to want to start conserving energy. You’d get changing electricity rate info from the electric utility via the smart meter, and then you can decide not to run smart appliances or turn off lights or do other things to save energy and money around your house. The smart meter could connect to a home energy management system, for example, to help facilitate this automatically. Yay! Everyone wins, right?

“The smart meter is a bad idea,” says Michael Weissman, vice president of corporate marketing of Sigma Designs, the company behind Z-Wave technology used in home networking products being rolled out by large service providers (read on). Weissman may be biased, but he does have a point: “[The smart meter] is just an aggregator of demand. The data that sits in a meter is mostly useless. What I care about is I’m spending this much and here’s the big energy user and what I can do to save money. Once that data sits in the Z-Wave network, I can provision that to my network and notebook.” Then that info can be used to turn devices off, dim the lights, etc.

There are more problems with waiting on smart meters and the smart grid.

Although millions of smart meters have already been rolled out, many electric utilities are still in “pilot land,” testing how they want to proceed with smart grid services. Utilities are very slow and cautious with this stuff, as they should be, but they are also notoriously conservative when it comes to change. Does the utility just want to slap a smart meter on your home and let someone else handle the in-home energy management network, or do they want to do the shebang? In general, utilities aren’t very comfortable going inside the house. It’s a far different world for them. Some will, some won’t, and others may partner with other companies to do that.

It will also take years to roll out all the smart meters for a true, national smart grid. If you’re not in one of the lucky areas that have smart meter deployments and true smart grid services like Time Of Use pricing, do you want to wait? It could be 2020 before smart meters allow many homes to save energy in smart and automated ways.

Big service providers like ADT, Comcast, Verizon, Vivint and Alarm.com aren’t waiting. They’re already marketing remote connectivity and security services that include some basic control and automation of lights and wireless thermostats—right form your smartphone. It’s very basic energy management—but people think it’s cool.

Maybe the electric utilities will partner with these companies to do the in-home energy management networking. Maybe they won’t.

Utilities are also not great with customer service—many still refer to customers as “rate payers.” And there are unresolved issues over consumer rights to their energy info being used and shared by electric utilities. Do consumers own that info, and what can utilities do with it?

There are also possible security issues with having all that energy info traveling over the electric utility’s network. Security protocols and standards for smart grid are being worked on to thwart hackers. But remember, hackers are hackers; they find ways to hack into networks, and the smart meter is a weak link in the grid. Some utilities are less than comfy opening their infrastructure to that.

There are also plenty of home energy management products from established players in home networking and control, including HAI, Crestron, Control4, Savant, Eaton, Panamax Furman, Eragy, GE, the list goes on. Some of these systems, like the Z-Wave products, can be bridged to communicate with smart meters, which are likely to use wireless ZigBee technology. But a better solution may be to get energy data from an electric utility via a good-old broadband Internet connection.

Bottom line is that you don’t need a smart meter to have a smart grid. An electric utility trial in Martha’s Vineyard, Mass., involving GE’s Nucleus energy management system, has received electricity cost and other data from the local utility over the Internet, not through smart meters.

I expect we’ll see more of this model adopted by some electric utilities.

So is the smart meter really a bad idea? It should provide basic services like demand response, which help utilities shed peak electric loads and avoid brownouts. But as link to your home network? Maybe not.